When prices are fixed and there are no imports or income taxes, the value of the multiplier is
A) greater than one.
B) equal to one.
C) less than one.
D) equal to zero.

Name: When prices are fixed and there are no imports or income taxes, the value of the multiplier is A) greater than one. B) equal to one. C) less than one. D) equal to zero.
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Question

Quizplus · Accepted Answer

The multiplier is greater than one when prices are fixed, as any initial change in spending leads to a larger overall change in income and output in the economy.

When Prices Are Fixed and There Are No Imports or Income